Brazil Inflation May 2016


Inflation stabilizes in May

Consumer prices in May increased 0.78% over the previous month. The print was above the 0.61% increase recorded in April and greater than market analysts’ expectations. The acceleration was mainly driven by rising prices for housing.

Inflation in April stabilized at March’s 9.3%, which had marked the lowest level since June 2015. The easing in price pressures comes after a number of hikes in the Central Bank’s SELIC rate in 2015 and a backdrop of recession. In addition, the effect of a number of price adjustments is beginning to fade. Despite the fall, inflation remains far above the Central Bank’s tolerance margin of plus/minus 2.0 percentage points around 4.5%.

Panelists participating in the LatinFocus Consensus Forecast see inflation closing 2016 at 7.0%, which is down 0.1 percentage points from last month’s forecast. For 2017, the panel expects inflation of 5.4%.

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Brazil Inflation Chart

Brazil Inflation May 2016

Note: Annual and monthly var. of IPCA consumer price index in %.
Source: Brazilian Institute of Geography and Statistics (IBGE).

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